What that looks like in dollars
A percentage is easy to nod at. Here it is as a monthly number, ad spend included.
| Yearly revenue | Floor, 5% | Standard, 7 to 8% | Growth, 10 to 15% |
|---|---|---|---|
| Yours | |||
| $500K | $2,083 | $2,917 to $3,333 | $4,167 to $6,250 |
| $1M | $4,167 | $5,833 to $6,667 | $8,333 to $12,500 |
| $2M | $8,333 | $11,667 to $13,333 | $16,667 to $25,000 |
| $5M | $20,833 | $29,167 to $33,333 | $41,667 to $62,500 |
The SBA ties its 7 to 8% to businesses that keep net margins of about 10 to 12% after marketing. If your margins are thinner, start at the floor and earn your way up.
Plan the whole year in one sheet, with this math built in.
Get the free templateA set-aside, not leftovers
Most owners spend on marketing when things get slow, or when someone shows up selling something. That is backwards. Marketing is what keeps the phone ringing, so it gets funded the way taxes do: off the top, every month, before the new truck, the new software, or the next shiny idea.
The percentage moves up as you push to grow. Across U.S. companies, marketing averaged 9.0% of revenue in 2026, and smaller companies put in more: about 13% for those under $10 million in revenue, according to The CMO Survey from Duke University (a small sample, so read it as a direction, not a decimal). In a 2026 study of professional services firms, the fastest-growing spent about 12% of revenue on marketing, against 5% at firms that were not growing.
Growing businesses spend more. That does not mean spending more guarantees growth. It means growth gets funded on purpose.
Fast results and compounding results, side by side
Your budget should pay for two engines at once, from the first month.
Ads are the fast engine. Turn them on and the phone can ring this week. Turn them off and it stops the same day. Which platform and which kind of ad is right (search, map, social, video) depends on your business and on what is working, and that changes. The principle does not.
SEO is the compounding engine. It is slow to start; Google's own guide says some changes "could take several months" to show up in search. But what it builds keeps working and stacks on itself: pages that rank, reviews that pile up, a name Google and AI tools learn to trust. The sooner you start it, the sooner it pays you back.
- Ads: calls now, while funded
- SEO: slow start, then it compounds
- Both together
Run only ads and you rent every lead, forever: the month you stop paying, the calls stop. Run only SEO and you wait months for the phone. Run both from the start and you never have to choose between this month and next year.
How to split it: the 70/20/10 rule
A common rule of thumb, popularized by Coca-Cola's marketing team around 2011: put about 70% on what is proven to bring in customers, 20% on what looks promising, and 10% on experiments. There is no study behind the exact numbers. It is a guide, and a good one, because it forces the right order.
Your foundation lives in the 70 once it is working: a website that is kept up, the ads that bring in calls, and the SEO that keeps building. When you are just starting, the foundation is the plan, so most of the money goes there and only a small slice goes to tests. New and shiny lives in the 10, and it never gets funded ahead of the foundation.
The website belongs in the foundation because both engines run through it. Every ad click lands on it, and every search ranking points to it. A bad website, or even a decent one nobody keeps up, sabotages both: you pay for ad clicks that never turn into calls, and you work for rankings that send people to a site that lets them down.
How much should my trade spend?
Trade benchmarks are thinner than you would hope. Here is what holds up, and where it comes from.
| Trade | What growing businesses spend | Where it comes from |
|---|---|---|
| Plumbing, HVAC, electrical, roofing | About 7 to 10% of revenue for growing shops; 5% is treated as a maintenance level | Guidance from the trade's software makers and trade press, not a formal study |
| Law firms | About 5% at firms that are not growing; about 16.5% at the fastest-growing | A 2024 study of 76 law firms (medians, salaries not included) |
| Med spas | About 7% on average | The med spa industry association's 2024 report |
| Everyone else | The general tiers: 5% floor, 7 to 8% standard, 10 to 15% to grow | U.S. Small Business Administration |
The yearly plan sets the direction
Once a year, set the plan. It takes an afternoon, and you can start it in any month.
- Start from what you actually bring in: your revenue over the last 12 months, not the number you hope to hit. A goal is not money in the bank.
- Pick your tier: floor, standard, or growth.
- Turn it into a monthly number and treat it as fixed, like rent. As revenue grows, the number grows with it.
- Fund the foundation first: your website, SEO, and ads, then everything else.
- Set a goal for each channel in plain numbers: calls, booked jobs, and cost per lead.
The quarterly check-in navigates
Every quarter, sit down with the numbers and ask one question per channel: keep it, stop it, start something, or shift money? The yearly plan is the direction. The quarter is where you steer.
Steer when one of these happens:
- Revenue drops or jumps a lot. The budget is a share of revenue, so it moves with it.
- The market changes. A competitor floods your ads, a new platform starts working, or a rule change hurts a channel.
- A channel's cost per lead climbs or falls. Move money toward what is getting cheaper and better.
One rule for the slow quarter: keep the compounding engine funded if you possibly can. Stopping SEO gives up ground you already paid to build, and restarting it means waiting all over again. We are writing a full guide to running these reviews; it will live here when it is ready.
Free download
The Marketing Budget Template
An annual plan with quarterly check-ins, the math built in. Enter your last 12 months of revenue and pick your tier; it fills in your monthly budget, funds the foundation first, checks your 70/20/10 split, and gives you four quarterly check-ins to track spend, leads, booked jobs, and cost per lead. Free: tell us where to send it and the link lands in your inbox, as a Google Sheet or an Excel file.
What your budget buys
At agency rates, a standard budget for a business doing $1 to $2 million a year buys one or two services, not a full program. Our digital marketing cost guide itemizes what each service costs, and our pricing page shows what we charge for the same work.